Conversation with Mother

Before entering university, I applied for the interest-free loan from one of our local banks. Honestly, the loan wasn't required as my parents had already accumulated enough. However, using the $30,000 to generate returns of say, more than 5% a year would be brilliant use of that money, which would otherwise be accruing a measly 0.025% per annum in a current savings account.

Now, what to do with the $30,000? I considered the 'capital guaranteed' structured products offered by banks, but delved deeper and realised that they weren't as attractive as made out to be in advertisements. Dividends weren't guaranteed and worse, the capital could be compromised should a 'credit event' happen. Seeing how they lack the security of bonds and the capital gains potential of stocks, they could probably be called a worse-of-both-worlds investment product. Furthermore, the investor will still be slapped with fund management fees even if the manager underperformed benchmark indices, or worse, suffered losses. Shortly after, the subprime mortgage crisis erupted and the Lehman minibonds saga ensued. Unwary investors lost money buying into complex derivatives they didn't understand. Having read about the anguish of losing life savings and having carefully accumulated nest eggs smashed, I resolved to become financially literate and become responsible for my dollars and cents.

In January 2010, I started a trading account with Phillips' Securities using their online trading platform. I put in $1000 of my own money as the deposit, and my mother entrusted me with $15,000 to invest. The young impressionable me, foolishly thinking that after gaining some rudimentary knowledge on reading analyst reports, blindly bought into 2 counters. On hindsight, these counters were over-priced and violated the cardinal value investing principle of not paying more than 1.5 times book value and 15 times earnings, amongst other criteria. These counters have since gone on to lose 25% and 18% respectively. The lesson really hit me where it hurt - my wallet. It dawned on me that there often exists some conflict of interest, which must be duly considered prior to any purchase. For example, the brokerage house may well be vested in the counter, screaming buy calls publicly but acknowledging the company was thrash privately.

My mother gave my brother $15,000 to invest with shortly after. He deposited the money with me. He soon became consumed by his own work - a start up company selling fitness equipment, and left me to manage the 'Ko Family Fund'. Still smarting from being blindly led around by the nose, I plunged into reading investment classics. Coupled with endless hours of trawling financial websites and blogs, I was equipped with better knowledge. My coursework also exposed me to Real Estate Investment Trusts and their workings, of which the knowledge I used to provide an edge.

I was reporting the status of the portfolio to my mother recently, which sparked off the topic for this blog post, and subsequent reflections.

Me: I've managed to achieve absolute returns of about $3000.

Mother: Good job Son. But $3000 only?

Me: Mother, you have to put things into perspective. $3000 represents an 9.7%* growth in the portfolio. Furthermore, it was a year where I managed CAP scores of 4.00 and 4.25 in the respective semesters, consistently qualified for the finals of 3 prominent bouldering competitions and got myself ranked 3rd overall in the Singapore Bouldering League, did a 3 month internship in a bid to shore up my CV, dedicated time to help pen articles for the local climbing magazine (DYNO Issue 5 and 6), took up the mantle of Chief Route Setter for ClimbNus10, and helped coach a bunch of novice women within the climbing team. I hope I've done a decent enough job.

Mother: Good job Son.

*As of the time of writing, that figure has since grown to 21% given the surge in the stock market (even after taking into account the losses incurred should I choose to liquidate my non-performing securities).

In 2011, I hope to
1. Rebalance my portfolio by diversifying into other asset classes to spread risk. I am currently overweight in equities because of a lack of financial knowledge. I want to learn more about the other asset classes such as commodities, defensive stocks like utilities, bonds, gold, etc, and how I act to lower risk and maximise returns.
2. Attempt to win an Open Men bouldering competition
3. Pull CAP up above 4 (am currently at 3.98/5.00).
4. Be a better person. Be a better son to my parents, sibling to my siblings, boyfriend to my girlfriend, friend to my peers.

i want to be able to speak like that

I've watched this video some time back but chanced upon it again recently. Despite having watched it twice, I never cease to be amazed by his eloquence and the way his thoughts just weave itself into a coherent, masterful oratory.

to bear in mind

Those who do not remember the past are condemned to repeat it
- George Santayana

Slaying the Buddha

There is a famous statement in Buddhist literature: If you meet the Buddha on the path, slay him. It is a simple way of teaching that the Buddha is not a god, but an enlightened person. Enlightenment, or Nirvana, is the ideal end state of that journey - a form of discovered awareness. As such, it can only be realised in consciousness, and not obtained by prostrating/submitting oneself to a god figure. At best the teacher can point one in the right direction. At worst, over-reliance exposes the inherent inadequacies in the student, who may be doomed to have that wisdom he seeks forever elude him.

On a recent trip to Thailand, I saw monks fiddling with DSLR cameras in remote mountains and poring over laptop brochures in bustling cities. At resting rooms allocated for them in bus terminals, an uneasy tension fills the air and they appear reluctant to converse with one another. Perhaps the different sects do not see eye to eye? At Central World Plaza, there is a giant Buddha statue sited outside the even more gigantic mall, with watchmen urging passers-by to offer incense to the statue, citing luck beyond one's wildest dreams. Incidentally, the facade of the mall was decked out in the glitz and glamour of the material world, contrary to Buddha's message of living a life of simplicity. The outdoor area was also playing host to three extravagant beer promotion events. The last I remembered, Buddhism and beer was incompatible. This deviance between that which is taught and that which is practiced is all very amusing to me. I've reflected and formed opinions on my observations, but decided against penning them down, for fear of reprisal.

what cave have i been living in?

'What cave have you been living in?'. This was the comment, made rather nonchalantly (and with no ill-intent) to me, which sparked off my inspiration for this blog entry.

I recently went shopping, and found myself fascinated at some of the items that were on the shelves. Intricate swiss-made watches with aesthetically-pleasing analogues; funky Sennheiser full ear headphones which are just so comfortable; exquisite wooden Tivoli radios with sweet dials and knobs; these items pressed the right 'BOY TOYS! ALERT!' buttons. Because of my ignorance of their existence prior to this trip, I was prancing around the stores like a little boy, constantly awed by everything on display. The 'Wow this is cool! Hey I've never seen that before!" comments led to my friend passing the disparaging remark. No doubt the remark was made in jest, and laced with friendly sarcasm, but it really set me thinking.

I think I have a problem. To let readers have a better grasp of what my problem is, I think it is better to share my thought processes upon entering, being in, and leaving a shopping mall.

Before I enter the shopping centre, I try to recall who the landlord/property manager is. It probably belongs to some Real Estate Investment Trust (REIT), so I'll run comparisons in my head on how the REIT stacks up against the other retail REITS on the stock exchange. What are current yields? Have the REIT manager been on the acquisition trail lately? Did it need to raise capital through a rights issue? Was it hit by refinancing problems during the recent financial crisis?

Once in the shopping centre, I observe the shopper traffic levels. High shopper traffic allows the mall to command higher rents, which leads to higher net profits to be distributed among shareholders. I also make mental notes on the occupancy levels. Is there space that is not let out? If yes, is the management doing anything to rectify it? Is there any addition and alteration works happening at the mall to deal with the competition from neighbouring malls?

Upon leaving the shopping centre, I reflect on my experiences within the mall. I recollect the typical shopper profile and whether the mall has lived up to its branding. I note the facade of the subject mall against that of other malls and evaluate which one has more curb appeal.

Judging from the above, perhaps I'm not cut out to be a shopper. What I'm lacking in shopping centre navigational abilities and a mastery of that-which-is-material, I hope I've made up for in spiritual and intellectual well-being.

As to the question of which cave I've been living in, it had better not be Plato's cave (refer to Allegory of the Cave in The Republic), where reality is only as real as the shadows cast against the wall, where prisoners too entrenched to norms to cast off their chains undergo permanent suffrage of the mind.